Authorized User + Misc.

[Anonymous]

Hello. I am trying to build up my credit for an employment background check occuring about 3 months from now. I currently have very little credit history (my oldest credit account is less than one year), and a blemish on my record (60 days late on a small credit card bill a few months ago), so my credit is very poor at this point.

I'm adding two authorized accounts. One is 6 years old with a $10,000 limit, no balance, and perfect payment history. The other is 8 years old with a $25,000 limit, no balance, perfect payment history. I've also opened a secured credit card with a $500 limit and will pay this off consistently.

My basic questions are:

1. How much of a bump can I expect from the addition of the two authorized user accounts?

2. Is there anything else I can do to bump up my credit? There is another 2 year old credit card with a $5000 limit I could have myself added to as an authorized user. Would this card be positive as well, despite the short age of the account?

3. How much of a bump can I expect from paying off the entire balance of my existing card?

Thanks! If you're in a hurry, the most important issue for me is the authorized account question. I'm reall hoping this will bump my score a lot!

Here's some information you can feel free to skip, since I'm sure this post is already too long.

The factors harming my credit are listed as: 1) a negative payment account; 2) hard inquiries 3) excessive amount carred on revolving accounts (this will be gone after my next credit update - account has been paid off in full and 4) a lack of a major credit agency (Visa, Mastercard, etc.) on my account. How much will the addition of a Visa and Amex boost my credit score?

[RobertEG]

Background checks do not focus on FICO scores or lenght of credit history.  They focus on YOUR DEBT.  And your history in its payment.  Not on some AU who wont be working for them.

Who is the employee source, and what are the reasons, for the "employment background check?"

Employment and security backghround investigations are not normally conducted with a focus on your credit score.

They are not creditors deciding on whether or not to grant you new credit.

If you were a recent college grad, with NO credit score at all, they would not bat an eye at that.  
They want to see your posted credit history,and YOUR current credit obligations.  Not those of others.  You have no credit obligation on an AU account.  So why would they have anything more than passing concern for any reporting on a non-obligated AU account?

They are conducted primarily to see who YOU owe, how much YOU are indedted for, and to see YOUR derogs in YOUR pror payment history.

I dont think addition of AUs will aid them in what THEY are looking for.

I did background security  and employment investigations for 30 years.  They probalby wont even look at your score.

They are looking for past bad traits in your credit history, and your own current indebtedness.  Adding an AU will just, in my opinion, add confusion.

They probably wont even know what an AU is, It may even cause them to expand their inquiries to those you now attach credit reporting association with.

I would not turn to AUs now.

[Anonymous]

Thanks for the response!

I currently have zero debt. I only have one blemish - I fell behind on a small credit card bill for 60 days a few months ago. Think this will be a problem?

[Anonymous]

Also, does anybody have a guess as to how much this will increase my credit score? I know it's a complex formula, but I'm open to wild guesses!

[Anonymous]

If you just want a guess then play around with the free simulators. You can google credit simulators and have a dozen different guesses. 

Many different formula's go into your score. While every one's situation is different, some times the outcome isn't a positive one. While you haven't posted anything on your present scores, and only say that you have a recent late, it is hard to assume which direction your scores would go by adding yourself as an authorized user. The general consumption is if the card being added to is of perfect standing with a long history then your scores usually increase. But weighing in the factor of your most recent late being negative may just balance off the equation. 

Whether or not you have a higher score after adding yourself as an authorize user, creditors will still see the recent late payment and may base their decision solely on this factor. If you are not looking for more credit or to apply for credit at the present time and just wanting to increase your scores as you work on building up some good history, then adding yourself as an authorized user is a way to achieve that.

You may also want to try GW'ing your late payment after about a year of good payment history with the creditor. There is plenty of information you can find here about GW letters. 

As far as employment concerns doing a credit check, Robert has that covered pretty well. The only thing I can add to it is that it all depends on what type of job and how highly sensitive of a position you are applying for. Scores aren't an indicator in the hiring process, but the general "negative" information is a major factor. Usually a lower score has more negative information, but isn't always true as in some one just starting to build up credit may have a lower score also. The same is true for higher scores, as in the higher the score the less negative information, but it is possible to have a higher score with negative items. As negative items age they have less of an impact on your scores. Employers pulling credit reports are more of risk factors not scores. For example, Financial Institutions usually pull your credit reports when hiring because of the risk factor of theft. Your score will not determine this risk, but to the hiring personnel reading the report and weighing in the facts will lead to a decision of hire or not hire. Most Financial Institutions will not hire you with a "bankruptcy" listed on your credit report, and it is possible to have credit scores in the high 700's over time with a bankruptcy listed.

Good Luck

[Anonymous]

None of the calculators have an option for adding authorized user accounts.....anyone have any experience with how much a perfect, 8 year old authorized user account can boost a score? My current score is 600, with only a year's worht of credit history and the one 60 day late payment. 

[Anonymous]

For those who discussed just the 60 day late payment as problematic for the background check - how much of a problem will this be, in your opinion?

The employer is a law firm, not a financial institution.

[RobertEG]

I dont see a prior 60-day late as a problem, or even a major concern.

What employers are looking for is not your FICO score. 

They are looking at your susceptibilty for outside influence.  Unpaid debt is a risk.  Paid debt is not.

They are looking for unpaid debt that could somehow be used to compromise you in the future.

In my opinion, a prior 60-day late that has now been taken care of in terms of the debt is inconsequential to an employment check.

I did both background checks for employment and nationaly security investigations for the grant of security clearances for over 30 years, and that was never my focus.

Compromise through threat of influence on collection of unpaid debt was the focus.